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‘Flunks’ Good Cause Test

Extending Section 301 Remand Deadline ‘Unwarranted,’ Say Plaintiffs

The Office of the U.S. Trade Representative can’t demonstrate good cause for a Section 301 remand deadline extension “that would leave uncured its established legal violation for another two months to the continuing detriment of American businesses and consumers,” said Akin Gump lawyers for Section 301 litigation test plaintiffs HMTX Industries and Jasco Products in an opposition brief Tuesday at the U.S. Court of International Trade in docket 1:21-cv-52.

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The court's April 1 remand order gave USTR “another chance” to provide by June 30 “the reasoned explanation it failed to provide” when it imposed the Section 301 Lists 3 and 4A tariffs, said mtge Akin Gump lawyers. DOJ said Friday that USTR needs the 60-day extension to Aug. 29 to file the remand results due to the volume of work involved, the agency’s limited staff resources and other projects that are compounding its workload (see 2206170034).

DOJ’s “primary justification” for the extension, that USTR lacks staff resources to review the 9,000 public comments that predated Lists 3 and 4A, “only underscores USTR’s inability to cure the defect at all,” said the Akin Gump lawyers. The court, in its April 1 opinion, remanded the tariffs to USTR after ruling against the government that the agency failed to adequately respond to comments and hearing testimony in advance of the duties, as it was required to do under the Administrative Procedure Act (see 2206170028). But the court's three-judge panel ruled the tariffs would remain in place while the agency reconsidered its rulemaking actions.

The court’s remand order gave USTR “a limited opportunity to provide the absent explanation for its original action, while setting fixed deadlines to ensure that this closely watched litigation, involving many thousands of stakeholders, would not unnecessarily bog down,” said the Akin Gump lawyers. The remand order was “not an opportunity to concoct new rationales or develop new explanations” for the tariffs, it said. Any such concoction would rise to the level of impermissible “post hoc” reasoning, they said. The remand order’s “limited opportunity for USTR to elaborate on its wholly inadequate original explanation was explicitly not an invitation for it to remedy a failure to grapple with those comments ab initio or to devise new rationales for dismissing them,” said the lawyers, using the legal term for “starting from the beginning.”

USTR is not entitled to more time to review comments it “purportedly had reviewed already” when it imposed Lists 3 and 4, said the Akin Gump lawyers. DOJ’s explanation “misconstrues the scope” of the court’s remand order and “flunks the ‘good cause’ standard,” they said.

The opportunity to elaborate on a previously given rationale for the tariffs, as the remand order instructed USTR to do, “should not necessitate a laborious process of re-reviewing all 9,000 comments and 13 days of testimony -- with newly hired staff, no less,” said the Akin Gump lawyers. USTR’s rationales for imposing Lists 3 and 4A “should already exist -- to the extent they exist at all -- in the administrative record,” they said.

The extension also is “unwarranted” because the court already gave USTR “more time than it took to review comments in promulgating List 3 and List 4 initially,” said the Akin Gump lawyers. Though USTR “protests that it is now working with a reduced staff,” the agency’s task, according to the remand order, “is simply to elaborate on the reasons the original team gave,” they said. “It is legally irrelevant what explanations the new team can come up with after the fact.”

The thousands of Section 301 plaintiffs “face obvious prejudice from being forced to continue to pay potentially unlawful tariffs” while they wait for the duties to be vacated or for “a final appealable judgment,” said the Akin Gump lawyers. The court already has recognized that USTR “committed a significant violation” of the APA, they said. With “challenged tariffs” remaining in place, USTR “should not be permitted to require plaintiffs to suffer additional delay so that a new staff can review the comments and testimony afresh to formulate new reasons for USTR’s years-old actions,” they said.